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"There is a terrible desperation to the increasingly pathetic rationalizations from the climate denial camp. This comes as no surprise if you take the long view; every single undone paradigm in history has died kicking and screaming, and our current petroleum paradigm 🐉🦕🦖 is no different. The trick here is trying to figure out how we all make it to the new ⚡ paradigm without dying ☠️ right along with the old one, kicking, screaming or otherwise." - William Rivers Pitt

Energy Efficiency and Renewables Are Lowest Risk/Cost Investments for Utilities

Sheryl Carter, NRDC December 02, 2014 | 2 Comments

A new report by utility and finance experts contains positive news for the environment, our air and our (and our utilities’) pocketbooks — the economics of electric power resources have made zero-emissions energy efficiency and renewable energy technologies the most financially attractive options to meet the nation’s future energy demands.

The report by the nonprofit organization Ceres, entitled “Practicing Risk-Aware Electricity Regulation: 2014 Update,” says energy efficiency, distributed (onsite) energy, and renewable energy (whose costs, in some cases, have come down dramatically since 2012) are enticing investments for utilities because they bring lower risks and will cost less than traditional energy sources used to generate electricity.

And almost without exception, the report says the investments that could cause the most financial harm for utilities, ratepayers, and investors are large base-load fossil fuel and nuclear plants, which are riskier and more expensive.

“The report's risk profiles make clear that energy efficiency is the cheapest, safest investment by far, followed by wind and solar energy technologies whose costs have dropped dramatically the past two years," says Ceres President Mindy Lubber.

We already knew that energy efficiency — aka smarter use of energy — is the cheapest, most abundant investment out there, as I noted recently in discussing the International Energy Agency (IEA) Energy Efficiency Market Report 2014 that demonstrated the global savings from energy efficiency are greater than the output from any other single fuel source — including coal, oil, nuclear, and gas. Meanwhile, the first national limits on power plant carbon pollution will increase energy efficiency, which will reduce the cost of compliance.

But as Ronald Binz, one of the authors of the new Ceres report, says, “the dramatic decline in the costs of renewable energy, especially utility-scale solar,” represents a major development that could have far-reaching consequences.

The changing economic landscape combined with the pending EPA power plant standards to reduce carbon pollution, does not mean change will come overnight or that there will be any let-up by the supporters of coal and nuclear power. But the trend line is positive and strongly suggests that the old ways of doing business for utilities and state regulators are no longer as viable as they once were, and in fact carry significant financial risk.

The latest findings by Ceres, a nonprofit organization that seeks to mobilize business an investor leaders on climate change, reaffirms the conclusions and recommendations in its 2012 report, “Practicing Risk-Aware Electricity Regulation: What Every State Regulator Needs to Know,” that discussed the aging power plant fleets, evolving technologies and regulations for climate change, and the changing nature of the risks that these challenges present for utilities, customers and shareholders.

The Latest Findings

In examining the conditions facing today's electric power industry, the new report cites a number of salient facts and reached some important conclusions that should be heeded by the utility industry as its plans how to address the nation’s energy needs, including:

•There is a clear and durable imperative for clean energy in the United States, driven by advancing technology, federal air quality rules, and the lower cost and risk profile of renewable and demand-side energy resources. Renewable energy technology costs have fallen sharply, closing the cost gap between renewable resources and traditional fossil fuel resources. Solar photovoltaic energy costs, in particular, have declined precipitously in recent years while wind and solar costs are expected to continue to fall through at least 2020, a characteristic not shared by other generation technologies.

•Utility business models conversations are shifting from a simple “cost of service” approach to consideration of one that expands utility service offerings and capabilities in light of carbon reduction goals, grid resilience needs, and customer engagement imperatives. This transformation is already happening to a degree that seemed unthinkable just a few years ago.

•Distributed energy resources — that is smaller power sources like demand response (when customers alter their electricity use at certain times of the day), storage, and distributed generation, that can be aggregated to provide energy necessary to meet regular demand — will play an increasingly important role in the 21st century electricity system. As states grapple with this reality, they must begin to plan for a much more complicated system that includes new technologies and varied sources of energy.The bottom line, as the report clearly suggests, is that the trend toward low-carbon energy resources, including energy efficiency and renewable energy, is unmistakable.

When we don’t need to generate as much electricity and/or use zero-emissions resources, we reduce the amount of climate-altering pollution belching into our air and harming our health. In short, as the report notes, “There is a clear and durable imperative for clean energy in the U.S.” that is being driven by new technologies, more favorable economics, stricter federal air quality rules, and consumer demand.

The welcome dissemination of common sense in the energy sector, with this news that Energy Efficiency and Renewables Are Lowest Risk/Cost Investments for Utilities, is laudable in this epoch of the lack of common sense in the service of profit over planet by the dirty energy 'industry'.

Anybody that listened to my advice to GO a few days ago did quite well. :icon_mrgreen:Tough luck for MKing that doesn't believe I "do the math". He likes SLB and won't sell, despite my advice to do so for the nearly a month now.

NEW YORK -- SunEdison Inc. is seeking as much as $700 million in an initial public offering of a unit investing in wind, solar and hydro projects in emerging markets, the first of its kind.

This year’s best-performing U.S. solar company filed Thursday to list the so-called yieldco after buying 757 megawatts of renewable-energy assets in Brazil, China, India and other developing nations. The company also acquired rights of first offer to buy other projects with 1,918 megawatts of capacity.

The TerraForm Global Inc. yieldco will own and operate the power-generation assets in high-growth emerging markets, the Maryland Heights, Missouri-based company said Thursday in a statement. Yieldcos allow developers to raise lower-cost capital by selling projects to fund additional ones, while offering attractive returns to shareholders.

The new company gives SunEdison “a separate vehicle with a very different risk profile” and a more “global breadth” than its already listed TerraForm Power Inc. yieldco, Jeffrey Osborne, analyst at Cowen & Co. in New York said by e-mail.

“It allows them to accelerate the cash collection from the projects that have been built and are sitting on the balance sheet,” he said.Renewable energy companies like NRG Energy Inc. and Abengoa SA have listed similar units, mainly holding assets in the U.S. Most recently SunPower Corp. and First Solar Inc. said in February that they’ll form a joint yieldco.

SunEdison has been working to develop projects in emerging economies for more than five years and now has in place a presence that allows them to finance projects at lower costs than locals, Cheif Executive Officer Ahmad Chatila said.

‘Strong Engine’

“We have a strong engine for projects in emerging markets,” he said in an interview. “The cost of capital is the biggest challenge for renewable energy everywhere but especially so in emerging markets.”

SunEdison’s asset purchase also include projects in Peru, South Africa and Uruguay, the company said. Terms weren’t disclosed and the transactions are expected to close by the third quarter.

The acquisitions are the first stage of SunEdison’s plan to capitalize on providing renewable power to fast-growing emerging markets, Chatila said in the statement.

SunEdison jumped 8.8 percent to $27.01 at 11:57 a.m. in New York after rising as much as 9.9 percent, the biggest intraday gain since Nov. 18. The shares are up 38 percent this year, the most of any U.S. solar company.

The company also said it secured a total of $362 million in financing from Terraform Global’s joint bookrunners to buy renewable energy projects. SunEdison has obtained $175 million of equity investments from Blackstone Group, Everstream Opportunities Fund II and Altai Capital Management.

With investors loving solar again on the public markets, the only major US solar installer that's still private will soon launch an IPO - and that's Sunrun.

According to its SEC filing, it plans to raise at least $100 million under the ticker, RUN.

Like SolarCity and Vivint, Sunrun installs solar at no upfront cost and instead, collects fixed monthly fees via long term contracts. Unlike its competitors, Sunrun is dedicated to residential installations and has 75,000 customers in 13 states.

Founded in 2007, Sunrun reported revenue of $198.6 million for 2014, almost quadruple that of the previous year ($54.7 million). Soaring expenses, however, still produced a net loss of $167.5 million, up from $66 million in 2013, according to the SEC filing.

Since it only has about $105 million in cash on hand, Sunrun needs to go public this year or find other sources of financing. It has raised $265 million in venture capital over the years.

We're surprised to see that while SolarCity has many more customers (218,000), Sunrun is ahead on revenue. Sunrun's total installations come to 430 megawatts, compared to SolarCity's 500 MW in 2014 alone, estimated to reach 1 gigawatt for this year, as it moves forward on its new microgrid-as-a-service.

Yesterday, we wrote about SunEdison's recent acquisition spree, buying up some of the biggest solar and wind developers in the world.

But that's not all. This week, SunEdison will launch another yieldco on the public markets - TerraForm Global (NASDAQ: GLBL). It plans to raise $1.1 billion in the IPO with shares in the $19-$21 range.